A wildfire in the Chilean city of Valparaiso has killed at least 16 people, destroyed 500 homes and forced the evacuation of 10,000 people.

The huge fire began consuming the outskirts of Chile’s port city of Valparaiso on Saturday, advancing towards its UNESCO-listed historic centre.

The military has taken over security in the city, located on the Pacific coast 110km northwest of the capital Santiago and with a population of 270,000, after the government declared it a disaster zone.

“At this time there are 16 confirmed dead,” Valparaiso Police Chief Julio Pineda told 24 Horas television.

According to Chilean President Michelle Bachelet, 2000 troops, 1250 firefighters and 17 aircraft were maintaining order in the region.

“This is the worst catastrophe Valparaiso has ever seen,” the regional government administrator, Ricardo Bravo, told local reporters on Sunday.

Thankfully, the UNESCO-listed historic city centre was unharmed and officials say the fire is largely under control.

This is the worst catastrophe Valparaiso has ever seen

Overnight, residents watched, helpless, from distant vantage points as the hills burned bright red.

The city is spread out over more than 40 hills, hindering emergency vehicle traffic.

“My brother’s house was entirely burnt. We had only finished it two weeks ago. We tried to save something but it was truly an inferno,” one resident, Cristobal Perez, told the Chilevision television network.

“I started to become overcome by the smoke along with my two dogs. It was terrible – impossible to breathe,” another resident told the channel.

The vast blaze has caused cuts to power and drinking water in many areas of Valparaiso.

More than 200 inmates at a women’s prison were evacuated due to “large amounts of smoke produced by the fire,” said Tulio Arce, regional prison guard director.

The cause of the fire, which began in woodland near the city late Saturday, was being investigated.

Chile’s interior minister said the disaster decree issued on Saturday by President Michelle Bachelet activated an “exceptional” constitutional provision allowing the military to be called in to help.

The navy, which has a major base in the port city, immediately responded by taking over security. It deployed uniformed personnel into the streets to maintain order and to help with the evacuations.

Valparaiso is one of Chile’s most important ports. It lived its era of glory from the mid-19th century to the early 20th century as a stopover point for ships steaming down South America and to round its southern tip into the Atlantic Ocean.

The centre of the city still features the many coloured houses dating from that period, built by European immigrants. Its cobbled streets and funicular trams running up near-vertical rails supported its 2003 listing as a UNESCO-protected heritage site.

Fires occur frequently in central Chile, where summer sends temperatures soaring. In February 2013, some 105 homes were destroyed in Valparaiso, affecting 1200 people, after a 27-year-old man started a blaze.

–with AAP